The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has initiated a nationwide engagement exercise to educate businesses on the potential impacts and benefits of the proposed tax reform bills.
Charles Odii, SMEDAN’s Director-General, highlighted the importance of the exercise in fostering clarity and understanding among stakeholders, including business membership organizations (BMOs) and local administrators.
- Kickoff Event: The engagement begins with a breakfast meeting in Lagos, where Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, will lead a session to unpack the reforms.
- Main Objectives:
- Provide SMEs with insights into how the bills will affect their operations.
- Address misconceptions and prepare businesses for potential enforcement mechanisms.
Proposed Reforms and Their Benefits
The tax reforms are designed to alleviate burdens on SMEs and enhance their growth prospects:
- Tax Exemption Threshold: Increasing the tax exemption threshold for SMEs from ₦25 million to ₦50 million in annual turnover.
- Consolidated Taxes: Streamlining tax processes by eliminating nuisance levies and consolidating multiple taxes.
- Zero VAT: Exempting exports and essential goods from Value Added Tax (VAT).
- Accountability: Ensuring SMEs can hold authorities accountable for the fair and effective implementation of the new policies.
Odii emphasized that these reforms address challenges raised by SMEs during past surveys and consultations, aligning with the sector’s needs.
The Role of SMEs in Economic Growth
With SMEs accounting for over 90% of businesses and more than 80% of employment in Nigeria, the reforms aim to:
- Reduce operational costs caused by arbitrary taxes.
- Promote accountability in tax administration.
- Boost Nigeria’s overall economic growth by empowering SMEs as the engine of the economy.
Next Steps
SMEDAN plans to hold further sessions across the country to ensure broad participation and awareness. Updates and key takeaways from these engagements will be shared via the agency’s official website and social media platforms.
This initiative reinforces SMEDAN’s commitment to creating a favorable business environment for SMEs, ensuring they maximize the benefits of these transformative reforms.
